Accenture shares tank 11% despite beating Q3 revenue estimates. Infosys ADRs fall 3%

Synopsis

Accenture's shares plummeted despite exceeding third-quarter revenue expectations, driven by AI-related service demand. The company faces challenges from reduced U.S. federal contracts. Consequently, Indian IT ADRs like Infosys also declined, while domestic IT stocks showed mixed performance, with gains in tier-2 companies and HCL Technologies, contrasting with losses in Infosys and LTIMindtree.

Accenture shares fell 11% on Friday, hitting the day's low of $273.19, notwithstanding a revenue beat for third quarter driven by growing demand for the consulting giant's AI-driven services from enterprise customers.

It reported revenue of $17.7 billion for the quarter ended May 31, compared with analysts' average estimate of $17.30 billion, Reuters reported, citing data compiled by LSEG.

The company is grappling with a weak U.S. federal contracting environment as the Trump administration has slowed new contracts and cut existing agreements in a bid to reduce federal spending, the report said, adding that the company said these changes have not had a material impact on its operations or financial condition.

Major indices on Wall Street were trading mixed, with the Dow 30 at 42,225.90, up 54.23 points or 0.13%. The S&P 500 was down 9.35 points or 0.16%, while the Nasdaq Composite traded at 19,464.10, down 82.13 points or 0.42%, around 12:23 PM GMT-4 (9:54 PM IST).

Taking cues, the American Depository Receipts (ADRs) of India's frontline IT companies, Infosys and Wipro, were also down. While Infosys ADRs were down 3% to hit the day's lows of $17.89, Wipro ADRs were marginally down at 0.33%.

Indian headline indices ended their three-session losing streak on Friday, led by bank, energy and IT stocks. Individually, HDFC Bank and Reliance Industries (RIL) contributed the most. While Nifty gained 319.15 points or 1.29% to close at 25,112.40, the 30-stock S&P BSE Sensex finished at 82,408.17, rising by 1,046.30 points or 1.29%.

Indian IT stocks today ended with strong gains, with tier-2 stocks taking the lead. Persistent Systems jumped 3.5% and was followed by Coforge, which rallied 2%. Mphasis was also up by over 1% at the closing time.

Among largecap stocks, HCL Technologies was the top gainer, rising by 1.3%.

Others, including Oracle Financial Services Software (OFSS), Tech Mahindra, Tata Consultancy Services (TCS) and Wipro, settled with gains up to 0.8%.

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Among laggards were Infosys and LTIMindtree, which closed in the red.

The 10-stock Nifty IT index ended with an uptick of 0.84%.

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